The Eurozone is headed for recession. Who is the weakest link in the "chain"?

2023-12-11 13:02:46Biznes SHKRUAR NGA REDAKSIA VOX

The eurozone will not be able to escape its first post-pandemic recession, with its economy contracting for a second straight quarter in the final three months of the year, while a mild recovery is seen in early 2024.

Economists warn that the current situation may only reflect the beginning of an upward trend. According to them, headwinds remain strong, especially those coming from massive increases in interest rates.

The weakness is mainly due to Germany, Europe's largest economy. Faced with a fiscal crisis and weak global demand, the country is expected to report a contraction of 0.2% in the fourth quarter – larger than the 0.1% drop originally forecast.

Bloomberg economists cut their forecasts for inflation through September 2024. However, quarterly forecasts do not see prices falling to the ECB's 2% target until then. According to data published last week by Eurostat, at the eurozone level, seasonally adjusted GDP increased by 0.6% in the third quarter of 2023 compared to the corresponding quarter of 2022, and by 0.5% in the EU . Compared to the second quarter, GDP fell by 0.1% in the eurozone, while it remained stable in the EU.